Problems in the UK mortgage market could actually work in expatriate buyers' favour, according to mortgage broker Offshoreonline.
Figures from Moneyfacts show mortgages on offer reduced by 22% from March to April, narrowing the options for borrowers already struggling with the tighter lending terms by Halifax and the withdrawal of First Direct, Co-op Bank, Northern Rock and others from the market.
But Tim Harvey, managing director of Offshoreonline, said that while most of the fallout in the mortgage market has been in the sub-prime category – deals that were based on 100% mortgages or where the applicant could not prove income – these have never been options for expatriates. “Most lenders will request a 20% deposit and either proof of salary or two years’ report and accounts for the self-employed. For our customers, that has been the norm, so we are not having trouble placing new purchases or remortgages.”
Harvey added: “One in three housing deals is now falling through as UK buyers struggle to find finance. For those needing to remortgage at the end of a fixed-rate term, the choice can look stark: endure the high standard variable rate imposed by your existing lender, or risk refusal elsewhere.”
However, the fall in house prices may mean that now is a good time to re-enter the market. Estate agency Savills reports that surveyors are now valuing houses at 10-15% lower than the asking price, with buyers more open to good-quality offers. This puts returning buyers in a favourable position, but only if they can commit to a 20% deposit to obtain their mortgage.
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